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(17/05/23)
 According to the latest data from Savills, the
Australian hotel market is showing strong signs of recovery with
ADR growth driving the rebound.

With ADR
averaging a third higher than pre-COVID19 levels, the sector is
making steady progress towards pre-pandemic levels, while showing
solid potential for further growth with occupancy still having
significant room to improve across the country.

Data shows the rolling 12 months up to March
2023 have seen the highest ADR growth across cities such as Darwin
(50%), Cairns (47%), Brisbane and the Gold Coast (42%
respectively) compared to the same period in 2019.

Those locations
are up from figures in 2018, with the exception of Sydney and
Melbourne, which are just below pre-COVID levels.

For the same period to March 2023, the figures
show every major market is now at pre-COVID RevPAR levels with
Darwin again showing the largest growth across the country at 64%,
followed by the Gold Coast (45%) and Brisbane (43%) for the same
period.

“What we are
seeing in the current hotel market is not typical of recovery in
past cycles; this is a rate-led recovery, not occupancy-led and is
supported by new product in most major markets,” said Max Cooper,
Director of Hotels at Savills Australia and New Zealand.

Occupancy in most cities still lags below that of
2018 figures, the strongest hit being the gateway cities of Sydney
and Melbourne but exponential growth in these locations is
expected as international tourism starts to return in earnest.

“With corporate FIT travel still around 70%+
of pre-COVID levels, business travel demand also has significant
headroom to grow and drive occupancy this year particularly in the
major capitals,” said Mark Durran, MD, Hotel Capital Markets at
Savills. “Sydney Airport is almost back to pre-pandemic levels of
activity with an approx. 87% recovery in passenger movements in
March 2023 compared to March 2019.”

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